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Can Cambridge's proposed 5 percent rule keep Kendall Square safe for entrepreneurs?

Posted by Scott Kirsner  February 25, 2013 09:02 AM

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With public companies like Google, Microsoft, Pfizer, Amazon, and Biogen Idec all expanding in Kendall Square — and willing to pay pretty much any price for office space — there's a growing concern that entrepreneurs could soon be priced out of the neighborhood. So Cambridge City Councillor Leland Cheung is pushing a zoning change that would require designers of new buildings to set aside five percent of the total square footage for "startup innovation space."

Exactly what is that? It's office space that can be rented in very small increments — perhaps a desk or a 200-square foot office — on a monthly basis, with shared resources like printers, kitchens, and conference rooms. Very much the kind of space that Cambridge Innovation Center or Workbar rent to entrepreneurs...

"We're thrilled that all these major players in the innovation space want to be in Kendall Square," Cheung says, "but it's a blessing and a curse. We want to be sure we maintain the right mix of startups and bigger companies. Cambridge is extremely active when it comes to creating affordable housing, because we value the diversity and the mix of people that attracts. We wanted to apply that same concept to office space."

LelandCheung.jpgBut unlike affordable housing, the proposed alterations to Cambridge's zoning rules wouldn't set any sort of price ceiling for what landlords could charge for this innovation space. "We're trying to give the market the flexibility to figure it out," he says.

And developers and corporations putting up new buildings in Kendall wouldn't necessarily have to put the innovation space in their own buildings; they could set it up in a different building in the area. That could be a boon to Tim Rowe's Cambridge Innovation Center, which has already started expanding beyond its home base at One Broadway to a second Kendall Square space at 101 Main Street, or other shared offices like Intrepid Labs.

Cheung says Cambridge's Planning Board probably won't start considering the issue of "5% for startups" until the summer. If it is enacted, he says the next issue Kendall will have to grapple with is the question of where startups will go once they grow past the 10- or 12-person stage.

Interestingly, MIT has already voluntarily agreed to adopt the 5% for startups concept as part of a major redevelopment plan that is wending its way through the planning process. MIT's plan would add almost one million square feet of new office space in or near Kendall.

In a piece from last October, the Globe reported that the average price for office space in Kendall was then about $54 a square foot. And from last July, here's my construction report on what's going up in Cambridge and Boston.

My take: I'm glad that Cambridge is trying to ensure that there's a place for entrepreneurs to cultivate new ideas in Kendall, but the neighborhood is fast becoming a constellation of Fortune 500 brands, with startups mainly working out of the Cambridge Innovation Center (just as there are still a few buildings dedicated to artists in Fort Point Channel, which was once an artist-dominated neighborhood.) Some growing companies may find space in East Cambridge, but that area is rapidly heading upscale. I predict the big winner will be downtown Boston, where startups are starting to find cheap space in the Financial District and Downtown Crossing, with companies like PayPal Boston and EnerNOC serving as anchors.

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About Scott Kirsner

Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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